A Swansboro man and his brother are the last remaining defendants in a $5.3 million fraud case after an alleged conspirator pleaded guilty this week in Lenoir County Superior Court.

Melvin Lyle Quinn, 56, of Goldsboro, pleaded guilty Tuesday to two counts of aiding and abetting the obtaining of property by false pretense and two counts of conspiracy. He will be sentenced after the resolution of the case.

Robert Edward Steed, of Swansboro, and Franklin Ronald Steed, of Denton, still face multiple charges of embezzlement, larceny, corporate malfeasance and felony conspiracy for their alleged involvement in the defrauding of Discovery Insurance, a Kinston-based company that provides auto insurance across the state.

The embezzlement scheme bilked Discovery out of more than $5.3 million with 910 checks written to cover fictitious claims, pulling an average of nearly $761,000 a year out of the company for seven years, according to court documents.

Ed Steed, the former vice president of claim at Discovery, is accused of being the central hub of the operation, keeping information about the actions of the others from each other, prosecutors said.

Edward Earl Waters of Kinston pleaded guilty in November to the same charges as Quinn. Waters agreed to cooperate with the prosecution and testify against fellow defendants.

Waters said he used most of his $2.3 million in ill-gotten gains on lavish gambling trips.

Russell Simeon Ward, of Goldsboro, who was also named as a conspirator in the case, died Nov. 9, 2011, a few days after the conspiracy was brought to light.

Quinn, Ward and the Steeds face maximum sentences of seven decades in prison.

Quinn and Ed Steed knew each other since they worked together at a Goldsboro insurance company in 1983, according to Assistant District Attorney Imelda Pate who read from the factual findings of the case during court proceedings.

Ed Steed approached Quinn “prior to 2000” about the possibility of embezzling money. They agreed and soon checks were written for false claims. Ed Steed would hand the checks to Quinn who would then deposit them and split the money equally between Ed Steed and himself, according to Quinn’s admissions.

Pate said during the Waters plea that prosecutors could only prove transactions through 2005, because the banks used didn’t keep older records. Between January 2005 and the end of the operation, Quinn deposited 111 checks for $737,143.21, taking home $368,571.60, give or take a penny. That averages out to about $52,653.09 a year.

Quinn told investigators that during this time, he maintained a salaried position at another insurance company, and only used the money for “everyday expenses.”

Quinn acknowledged he knew the Steeds and Waters, but was unaware of Frank Steed’s and Waters’ involvement in the conspiracy.

Quinn’s attorney Jeff Holtz said his client is seeking a lighter sentence for cooperating with authorities and helping Discovery Insurance track down some of its money.

Page 2 of 2 - A court date for either Steed has not been set.

Contact Daily News Senior Reporter Lindell Kay at 910-219-8455 or lindell.kay@jdnews.com. Follow him on Twitter and friend him on Facebook @ 1lindell.